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Theme: Digital Life

As part of our ongoing discussion of the investment themes we focus on at Foundry Group, it is time to discuss digital life. Certainly anyone who is reading this blog post is living a digital life, and among the partners at Foundry Group, we are all gadget-lovers, early adopters of software and online services, part-time IT support staff for our own home networks, and digital media creators, curators and consumers.

Our digital life theme evolved from our own experiences as early-adopter creators and users of digital media, as well as from time spent over the years evaluating dozens of investment opportunities that we categorized as digital home, digital living room or convergence companies. After sifting through the landscape of these digital home companies for several years, we came away with only one investment: Sling Media, makers of the Slingbox.

In fact, we began calling digital home an “anti-theme”, because it seemed to serve more as a filter for companies we knew we wouldn’t invest in, rather than ones we would. Our investment in Sling happened precisely because Sling was quite unique and unlike any of the other digital home companies we looked at over the years. After a great outcome with our Sling Media investment, we decided it was time to take what we learned and refine our thinking behind the digital home theme and recast and refine it into the theme we now call digital life.

So what it is different about what we are calling digital life vs. what we used to call digital home? Some of it is simply a matter of timing – when we first started looking at this area in the 2000/2001 time frame, PVRs were a relatively new concept, home network deployment and broadband penetration were just starting to accelerate and the iPod was only beginning to take over the digital music world, while the cost of processors and storage needed be halved several more times by the (thus far) relentless work of Moore’s Law.

Since then, we’ve seen a massive increase in computing power, huge growth in storage capacity (with estimates that the average household will use nearly four terabytes of space by 2010), deep penetration of broadband, a proliferation of devices capable of playing back digital media and a huge increase in the speeds of wireless LANs. So convergence is finally (sort of) here. All media and all devices have gone digital. Users want access anywhere, anytime. But managing the explosion of media assets, networks and devices remains difficult. Software and services that just workand make our lives easier in this realm are needed to help the average user cope.

Back in the day, there was also a tendency for digital home companies to either attempt to sell gadgets and set-top-boxes or provide a software layer to power said gadgets and STBs. However, both approaches met with challenges: either low-margins from attempting to sell hardware at a consumer price point or tremendously long sales cycles and shallow revenue ramps as a result of trying to sell software to the incumbents who provide devices in the home like Scientific Atlanta, Motorola, DirecTV, Sony, Phillips, D&M, etc — none of whom has a clue when it comes to delivering a good user experience via tight software/device integration. A third approach was to increase the lifetime value of a user by tying a device to a subscription service or revenues from ongoing purchases of content to feed the device (think TiVo and iPod).

When we invested in Sling, we had been looking at companies that fell into the above three basic buckets for several years. Sling had a refreshing approach – sell a gadget and make nice margins, without charging ongoing service fees — a good thing from our point of view since we think the consumer suffers from subscription fatigue. And Sling’s pioneering concept of place-shifting was an elegantly backwards way at looking at looking at the problem: instead of trying to get content off the PC and onto the living room TV and stereo, Sling decided to do the reverse and focus on getting the living room entertainment center onto the PC and smartphone, regardless of the user’s location.

Breaking into the living room continues to be a challenge even for the behemoths. Microsoft has had relatively little luck in this area with their Media Center PC, though clearly the horse they are riding into the living room now is the Xbox, with the folks at Sony and Nintendo also playing here with their respective consoles. Even Apple, the king of digital media devices, has only dipped their toe in the water with the Apple TV, which is clearly a first-gen (and tentative) step into the dangerous waters of the living room.

Our experience with Sling provided us with some guideposts as we refined our thinking around digital life: focusing exclusively on the living room as the center of the digital home was going to be extremely difficult for most startups given the power of the incumbents who control the devices that live there. And it is no picnic for the incumbents either, as mentioned previously.

Another big observation from our work with Sling is that the user experience has to be great from the moment the box is opened: unpacking the product, setting it up, installing the software and day-to-day use has to be brain-dead simple and a pleasure to use, or the thing won’t enjoy widespread adoption. And with the current state of the art in home networking technology, this is very difficult for any vendor to achieve.

Furthermore, in most cases, trying to build a device is a tough road to hoe for a startup, for the reasons mentioned previously. So within this somewhat broad definition of digital life, what are the kinds of things we are interested in at Foundry Group?

In general, we will be intrigued by software and services (and occasionally, but not very often, devices) which work well with the existing entertainment infrastructure in the home and which help a user cope with managing the complexity behind their growing mountain of digital media and menagerie of devices. These solutions should work wherever a user may be and allow them to consume, create and share the media which comprise their digital lives. Finally, these products must be extremely well designed and brain-dead simple to use. The usability bar for digital life products is very high — they should work automagically and be easy for technophobes to embrace, or their adoption will be permanently impaired.

In the Foundry Group portfolio, Memeo is currently the standards-bearer of the digital life theme. We’ve explained in detail in a previous post why we are excited about our investment in Memeo, but put briefly, Memeo deals with the rapidly-growing mountain of digital content each of us must manage by providing content-aware and multi-device capable continuous backup, data synchronization and sharing. These simple but powerful tools might have previously been considered professional grade or enterprise-class solutions, but just like terabyte NAS or real-time encoding and streaming of HD video, they are making their way downstream into the consumer market.

So if you’re building a company focused on improving our digital life, please let us know, we’d enjoy hearing from you. We love playing with new toys and thinking about what the next important company in this ecosystem might be. Worst case scenario, you’ll get some product feedback and perhaps a few new users.

Ryan – you mentioned Microsoft's Xbox in the living room – I must confess that I am jealous of that little box. Back in January on my own blog I wrote that I wished I could have a device like that for the SMB space.!

My son is a Microsoft X-Box live fan. He takes it for granted that he can fire up the machine, it connects to the Internet in seconds and he is blowing up aliens while instantly talking on headphones to the contacts on his friend list. That list includes someone half way around the world. As an IT manager – I wish I could do that today with voice and video communications! My organization has staff spread across Canada, to get the same functionality that he does with the X-Box, I have to set up a web based meeting tool and then setup (and pay for) a phone conference with an 800 number for the remote team to call. In the time it takes me to do this – my son and his buddy list have reached level 5 of whichever game they are playing. Can we say “collaboration”?

Kameir

One side effect of the digital life is that not only does my real persona get inundated with information delivered by phone, email, radio, television, co-workers etc. but now my digital representations are multiplying information overload by creating dozens of inboxes all over the web that receive messages and requests from other users of the system (i.e. MySpace, LinkedIn, FaceBook, a variety of forums, etc.).

The OpenID thing does not seem to catch on. People seem content having ‘different online personas’ for different purposes, as they may present themselves different for a date then for – let’s say – a future employer).

Utilizing Open Social standards, we are attempting in a first step to make all communication systems (and search(es)) available from one portal and in a second step concentrate all of the users online personas in one (congruent) online personality managed through one meta account. So, when you start your browser in the morning you will be logged into all your accounts and all new information in these accounts will be available with one click of a button.

For now we are a calling it Radiux. Call me if you would like to talk about it. You have my number 😉

Chris.

hdhometheater

Proposal for wining the war in TV

DIGITAL
CONVERGENCE OF ALL THE WORLDS OF HD HOME THEATER

I
have up for acquisition (for sale) hdhometheater.com with 43 other major global
extensions. These products have unlimited potential for increasing global
market share for you, and your affiliations throughout worlds of home entertainment. Which includes the all
worlds of >

I listed over 300 corporations below that may
be interested in acquiring these products for themselves, or in partnerships.

Acquisition “for sale” >

44 Generic HD Home Theater

Domains for Increasing Global Market Share.

hdhometheater.com

hdhometheater.asia (Asia)

hdhometheater.sg (Singapore)

hdhometheater.jp (Japan)

hdhometheater.cn (China)

hdhometheater.tw (Taiwan)

hdhometheater.hk (Hong Kong)

hdhometheater.kr (South Korea)

hdhometheater.co.kr (South Korea)

hdhometheater.or.kr
(South Korea)

hdhometheater.ne.kr
(South Korea)

hdhometheater.net

hdhometheater.info

hdhometheater.org

hdhometheater.mobi

hdhometheater.tv (Television)

hdhometheater.biz (Business)

hdhometheater.us (USA)

hdhometheater.co (International)

hdhometheater.org.uk
(United Kingdom)

hdhometheater.co.uk (United Kingdom)

hdhometheater.de (Germany)

hdhometheater.fr (France)

hdhometheater.mx (Mexico)

hdhometheater.es (Spain)

hdhometheater.it (Italy)

hdhometheater.spb.ru
(Russian Federation)

hdhometheater.be (Belgium)

hdhometheater.su (Soviet
Union)

hdhometheater.se (Sweden)

hdhometheater.pp.ru (Russian Federation)

hdhometheater.ch (Switzerland)

hdhometheater.net.ru
(Russian Federation)

hdhometheater.in (India)

hdhometheater.ru
(Russian Federation)

hdhometheater.org.in
(India)

hdhometheater.org.ru (Russian Federation)

hdhometheater.eu (European Union)

hdhometheater.com.es
(Spain)

hdhometheater.nom.es (Spain)

hdhometheater.org.es (Spain)

hdhometheater.dk (Denmark)

hdhometheater.ae (United
Arab Emirates)

hdhometheater.msk.ru
(Russian Federation)

>Taking your company, and many of your contacts to the next
level.

This acquisition proposal could be very
important for the your global corporate strategy, and that of your many
affiliations. All monies associated with the implementation, or marketing of
this proposal may be tax deductible. (see below). Please have a representative reply a.s.a.p.
with your level of interest. (phone
call)

THE FUTURE OF HOME ENTERTAINMENT

&

HD HOME
THEATER

Generic hd home theater domains have unlimited potential for
growth, branding, sales, marketing, advertising, and distribution amongst countless corporations & trade
associations. This is one of those one
time opportunities that may not sound like a big deal at first. Share this
proposal with your clients, Board of
Directors & Management Team. The more time that they consider how these
premium generic hd home theater domains may be implemented, the greater
possibilities for you, and your clients will emerge. Achieve market saturation in a fraction of
time with the implementation of these domains. This is truly a one-of-
a-kind product & one time opportunity.

The Battle for the Digital Home – Turn your business affiliations into digital media, hd
home theater, AV, consumer electronics, Internet TV, VOD, 3D, Hollywood, IPTV, &
entertainment powerhouses. These domains
may be used on many levels. Corporations such as yours may use these products
for themselves, or in partnerships, by consolidating all the worlds of home entertainment.

This is the perfect time
in history to create a one stop portal/website for all the worlds of hd. 100’s
if not 1000’s of corporations will come onboard. These domains will create a chain reaction in bringing
a endless supply of consumers, and partners together for the good of all. Not only for purchases, but also in the
education on how to use the new technologies of hd. What good is technology if the public does’nt know how to use it easily. The biggest problem
you and your partners will have is managing the growth, and what do with all
that new revenue. Use each hd home theater extension for a different segment of
hd industries. Commercials, sales, advertising,
education videos, distribution, Internet TV, VOD, the possibilities are endless. The public, don’t use 85% of their hd home
theater TV technology. Show them how and
they will come.

v These domains could be the missing link in
globally converging the worlds of cable, digital media, home entertainment,
consumer electronics, & hd home theater.

As you know the toughest
challenges facing home entertainment, Internet TV, and all the hd home theater industries today
is fragmentation. The implementation of
these domains will help solve that problem.
Leverage business partners to maximize sales, marketing, and in contract
negotiations. Create a whole new portfolio of business partners.

Generic hd home theater domains has unlimited potential for
corporations in the fields of;

*Internet TV – HBO, Google TV
& Sony, Yahoo TV & Samsung , Boxee,
or Apple TV who will win the Internet TV War? Answer: the company that acquires
these domains. The convergence of the
internet, cable, digital media, 3D, high-definition digital TV services, VOD, consumer
electronics, and the hd home theater industries is soon to become a digital
revolution. Become partners with many
global corporations.

* Even if you don’t use these products for yourselves, you may use
in partnerships, resale for a profit, or for the use in leveraging contract
negotiations with other corporations. * Also you may find me a buyer and receive
the referral commission. With your contacts & affiliations, the sky’s the
limit.

*The Bottom line;

* The implementation of
these domains may help integrate all the worlds of home entertainment, and will play a big role
in the digital convergence.

* Unlimited potential
for global marketing and commerce.

**WILL CONSIDER ALL OFFERS

Acquire all domains as a package. $6,500,000 (US) for all 44 domains. $650,000(US) referral commission. (by finding me a buyer –
10% ). 25% over the asking price of $6,500,000.

You
have my permission to share this document with any corporation and/or person
you assume necessary to facilitate this proposal. You have many business affiliations that may
be interested. Private seller not a broker. I own or control all of these domains.

The price of these domains is a small
fraction verses the funds they will generate for many years to come. There is very little, to no down side on the
acquisition of these domains.

If you are interested in acquiring these
products, or interested in the referral commission, contact me immediately. I will hold-off on selling these domains to
another corporation. This will give you time to consider this acquisition.

Price, and terms of sales are negotiable

Will Consider All Offers

Thank
you: I hope to hear from you very soon.
Please reply with your level of interest a.s.a.p. Time sensitive proposal.

Other domains of
interest – FREE with acquisition of all premium
domains.

hdtvpower.com hdtvhometheatre.net hdtvpower.info

hdtvpower.net hdtvhometheatre.org 1080hometheater.com

hdtvpower.org hdtvhometheatre.info

Domains that may be used
in partnerships with respected companies.

nextag.mx rapidshare.mx

Ø Monies associated with marketing, or the implementation of
this proposal may be tax deductible. For
I live at Garden Terrace in Austin Texas, this is a foundation Communities
property (Non- Profit). They help the
homeless, and very low income. For more
info visit foundcom.org (United
Way) “ I may be down but I’m not
out”

Ø Note: Generic hd home theater domains would be a
perfect fit for Yahoo’s, Best Buy’s, Sony,s & Google’s new global corporate strategy.

After reading this theme and several youtube video interviews of Brad Feld, I think I’ve found the right organization I’ve been looking for. Thank you for providing so much information about what your organization and what kinds of companies you are after. I’ll be sending my email shortly since apparently my circles don’t seem to intersect. – Ed Horcasitas, ICE BlackBox, Inc.